To establish procedures for the review, classification and
administration of all awards from private sources; to
ensure that the purpose for which an award is made is in
accord with University policy; to establish criteria by
which gifts can be differentiated from grants, contracts,
and service agreements; and to establish administrative
responsibility for the acceptance and administration of
such awards. When the terms "grants and contracts"
are used in this policy, they refer to the research,
instruction and public service functions of the University.

POLICY

Prior to acceptance, awards from private sources must
be reviewed for compliance with University policies,
including Regulation Number 4, which states in part:

"University participation in tests and investigations shall
be limited to activities which lead to the extension of
knowledge or to increased effectiveness in teaching.
Routine tasks of a commonplace type will not be
undertaken."

"University laboratories, bureaus, and facilities are not
to be used for tests, studies, or investigations of a purely
commercial character, such as mineral assays,
determination of properties of materials, the performance
efficiencies of machines, analyses of soils, water,
insecticides, fertilizers, feeds, fuels, and other materials,
statistical calculations, etc., except when it is shown
conclusively that satisfactory facilities for such services
do not exist elsewhere. . ."

"For all tests and investigations made for agencies
outside the University, a charge shall be made sufficient
to cover all expenses, both direct and indirect.",

DEFINITIONS (See Section V for Specific Characteristics)

The definitions included in this section are provided for
the purpose of classifying gifts, fellowships, contracts,
grants and service agreements.

Gift

Legal A gift is a conveyance or transfer of an
asset (including cash or negotiable instruments)
made with charitable intent and without
consideration.

General Characteristics A gift may not include
an implicit or explicit statement of quid pro quo
or purchase of services, goods, or other
exclusive information not shared by others. Gifts
may not be made in lieu of payments for services
performed by physicians employed by the
University.

By contrast, contracts, grants and service
agreements require consideration, i.e., a
promise to perform an activity (e.g., the
conducting of research, provision of a service,
etc.). In addition, gifts may be requested by a
written proposal; however, the are typically less
technically and financially detailed than contract,
grant or service agreement proposals.

Fellowship

Legal A fellowship is a formal commitment to
provide monetary assistance to an individual and
is commonly used to support advanced study and
training.

General Characteristics The award may be
sponsored from any one of a number of sources,
e.g., private, federal or foundation. The primary
focus of the fellowship is on the career
development and enhancement of the individual,
and it is commonly used to support advanced
study and training. The application may require
a description of a specifically planned project. However, for expenditure purposes, the awarded
funds are generally not tied to individual
categories such as equipment, personnel, etc. A
fellowship may have a term of several weeks to
several years and support only a small fraction
of the entire cost involved. Reporting
requirements are generally minimal.

Contract

Legal A contract is a written agreement between
two or more parties, which sets forth terms,
costs, and conditions for delivery of specified
services, materials, or equipment by one of the
parties to the other party for some return
performance (consideration).

General Characteristics A procurement type
award to perform work of direct benefit to the
agency as compared to a grant which is a
support type award. The contract requirements
are normally defined by the sponsor, i.e., content
of work statement, schedule, format of periodic
progress reports, terms and conditions, etc. Contracts offer more universal competitive
opportunities to all types of scientific sources
and are used by the awarding agency as a
means of fulfilling its program objectives.

Grant

Legal A grant is a simpler form than a contract
of a bilateral written agreement between two or
more parties which obligates the recipient to
provide something or to perform a service of
more than incidental significance to the grantor. A grant usually provides for reimbursement for
specified costs of basic research.

General Characteristics The award is of a direct
assistance nature, usually competitive and for
the purpose of obtaining support to accomplish a
public purpose authorized by governmental
statute or by-laws/policy of a private granting
agency. The specifics of a project are usually
defined by the applicant and approved by the
grantor with a resultant award containing more
flexible terms and conditions with respect to the
expenditure of funds.

NOTE: A grant may be distinguished from a
fellowship by the defining of the area of focus or
objectives. Whereas a grant normally
emphasizes the purpose and result of a project,
the primary focus of the fellowship is on the
career development and enhancement of the
individual. This distinction may be determined by
a review of the stated purposes and goals of a
sponsor for a particular type of award.

Service Agreement

Legal A service agreement is a written
agreement between the University and an
external source containing the special and
essential terms and conditions under which
items of goods or services are to be furnished by
the University.

General Characteristics A service agreement
normally involves the provision of goods or
services by the University to external
organizations. These awards may generally be
differentiated from a contract or grant for effort
related to research, instruction or public service
if the scope of work from the procuring agency
relates to a clearly defined known quantity
versus a project which involves definition and
development of a scientific protocol within the
scholarly expertise of the University. The scope
of work under a contract or grant serves to
enhance the state of knowledge, whereas tasks
under a service agreement may be exclusively of
a data gathering nature.

Agreements which contain elements of both contracts
or grants and service agreements shall be classified
according to the preponderance of effort in the
project.

NOTE: The following information on purchase orders
for goods and services and affiliation agreements is
provided for general information:

A purchase order for goods or services may
be generally differentiated from a service
agreement by the limited duration of the
purchase order and by the distinction that
service agreements normally require
execution by all parties, whereas purchase
orders for goods and services are accepted
on a unilateral basis by the receiving party. For further information concerning purchase
orders for goods and/or services by the
University to external organizations, refer to
PPM 500-4.

An affiliation agreement establishes a
relationship between the University and other
organizations (such as a hospital or
institution of higher education), which
involves informational or personnel
exchange. Affiliation agreements generally
provide for: utilization of facilities for
academic programs or for clinical
experience of students, or for medical
residency programs which involve a mutual
exchange of residents between institutions. Generally, no money is involved and the
agreements continue until terminated by
either party. For further information
concerning affiliation agreements, please
contact the Business Office.

CLASSIFICATION OF AWARDS

Background

Judgment must be exercised in order to classify the
award in accordance with the intent of University
policy since in many situations all of the above
characteristics will not be present. The decision as
to award classification cannot be made based upon
the presence or absence of a single characteristic
or criterion. The award must be reviewed in toto in
order to determine its proper classification.

The classification of each award from a private
source is determined on an individual, case-by-case
basis, utilizing the definitions in Section IV. and the
general characteristics provided below, which are
representative but are not meant to be all inclusive. Additional information may be requested from the
principal investigator during the process if
incomplete data is provided to the Gift Administration
Office, Office of Contract and Grant Administration
(OCGA), or the Business Office.

All gifts and grants from private sources are
reported to Systemwide Administration by the Gift
Administration Office. Acknowledgement letters will
be prepared by the Gift Administration Office for
signature by the Chancellor or other University
Official, as appropriate.

Classification Procedures

All awards received directly by a campus department
will be preliminarily classified by that department as
a gift, fellowship, contract, grant or service
agreement.

All awards initially classified as gifts or fellowships
shall be forwarded to the Gift Administration Office. However, all awards which are not considered
clearly definable gifts or fellowships by the Gift
Administration Office will be immediately forwarded
to the OCGA for additional review and classification. It is the policy of the Gift Administration Office to
routinely send all proposed gifts for research from
private, for-profit sponsors to OCGA for review. OCGA has the authority for final determination of an
award classification. However, prior to such
determination, the OCGA will request additional
documentation, as appropriate. All awards initially
classified as contracts or grants shall be forwarded
to the OCGA, and all awards initially classified as
service agreements shall be forwarded to the
Business Office, with the exception of SIO
departments and laboratories where the OCGA/SIO
performs the initial review. The above offices will
perform a formal review and verify classification in
compliance with University Policies, including, where
applicable, University Regulation Number 4, patents
and copyrights, use of human/animal subjects,
biohazardous materials, space requirements,
indirect costs, etc. The documents provided should
be sufficient for these offices to proceed with formal
acceptance in a timely manner.

Regardless of the designation of an award for
research as a gift or grant, it will be subject to the
research review process as well as to the
administrative rules and procedures which apply to
all University funds.

NOTE: Do Not Hold Checks from Sponsors in the Department or School. Immediately upon receipt, checks for awards
preliminarily classified as gifts or fellowships (as
well as supporting documents) shall be sent to the
Gift Administration Office. Checks for awards
classified as contracts, grants, service agreements
(or purchase orders) shall be sent to Extramural
Funds Accounting with the IFOAPAL designation and a
breakdown of the allocation. In accordance with
University policy, any check over $100 must be
deposited on a daily basis.

Classification Criteria

Gifts

Awards which have the following characteristics
ordinarily will be classified as gifts:

Donor imposes no contractual requirements,
written or oral (other than general
restrictions of purpose, e.g. educational and
general purposes, type of research, type of
student aid, library book fund, loan fund, use
by a selected department, etc.).

Funds are awarded irrevocably.

Gifts may be restricted for a specified
capital project or specified facilities within
new or existing buildings. Gifts may also be
specified for general research purposes and
for various endowment purposes, as well as
for current expenditures to benefit specific
campus groups such as for scholarships,
fellowships, library or equipment purchases.

There is no consideration (promise to
perform) exchanged by the University or its
employees for the gift, other than to use the
funds for the purpose intended by the donor.

Awards from For-Profit Entities

When awards are from For-Profit Entities, the
presence of the following general criteria, in
addition to the above, may result in the
classification of such funds as a grant or
contract in lieu of a gift, when such funds are
designated for the research of a specific
investigator:

The research relates to the testing of a
product or drug or provides a direct
benefit to the proprietary interests of the
entity;

Human or Animal subjects are involved,
or Recombinant DNA;

Payments received are based upon
specific expenses incurred;

The investigator receiving the funds is
consulting with the funding entity and
intends to use the gift funds for support
of research for the same or similar
purposes;

The investigator receiving the funds has
a proprietary interest in the entity;

the investigator intends to or has
entered into a confidentiality agreement
with the funding entity;

The investigator has or will be receiving
concurrent gifts and grants/contracts
from the funding entity.

Fellowships

Awards which have the following specific
characteristics will generally be classified as
fellowships:

Sponsor's stated purpose or intent is
primarily to support the career development
or enhancement of the individual rather than
specific goals or objectives of a research
project.

Simplified application form and procedure
which may include completion of a
sponsor-provided application form and
submittal of endorsement letters from
persons familiar with the fellow and
sometimes from a Dean or other institutional
official. A detailed budget is not usually
necessary.

Award is normally for a fixed amount
determined by the sponsor and rarely
exceeds the recipient's equivalent* UC
academic salary. In some instances, monies
may be provided for a limited amount of
supplies, travel, etc. Indirect costs are not
usually provided, however, a fixed amount or
percentage may be included as a
discretionary institutional allowance.

*"Equivalent" is defined as "the salary that
the fellow would be expected to receive if a
salaried appointment were to be offered."

Detailed technical reports are not normally
required.

Restrictive patent or other proprietary rights
are not appropriate or acceptable for
fellowship awards.

While the agency designation of the award,
i.e., grant, grant-in-aid, fellowship, should be
considered as supporting agency intent of
the purpose of the award, it is not a
determining factor and must be reviewed as
only one criterion in conjunction with the
above criteria.

Contracts, Grants or Service Agreements

Awards which have some or all of the following
characteristics will generally be classified as
contracts, grants or service agreements.

Provision for audits by or on behalf of the
grantor;

Grantor is to receive or be entitled to receive
some consideration, such as a detailed
technical report of research results, or a
formal report of expenditures;

Testing or evaluation of proprietary
products, i.e., the product tested is supplied
by the agency and/or results of the test or
evaluation could provide potential
commercial benefit to the agency;

Researcher has existing consulting
agreement with grantor which is related to
researcher's area of interest;

The research, training or service is directed
toward satisfying specific grantor
requirements (e.g. terms and conditions
stating a precise scope of work to be done
rather than a general area of research);

A specified period of performance is
prescribed;

Termination is at the discretion of the
grantor;

Funds unexpended at the end of a specified
period shall be returned to the grantor (not
applicable to service awards);

Patent rights are requested by the grantor;

Publication restrictions are requested by the
grantor.

Classification Determination

Final authority for determining award classification
rests with the Chancellor, subject to the
recommendations of the cognizant academic Vice
Chancellor in consultation with the Vice Chancellor-
Business Affairs or Vice Chancellor-Administration,
as appropriate.

ACCEPTANCE AND ADMINISTRATION OF AWARDS

Gifts or Fellowships (Gift Administration Office)

Awards formally classified as gifts or fellowships
shall be administered by the Gift Administration Office
in accordance with PPM 410-1, 410-2, 410-3 of the
campus Policy and Procedure Manual.

If an award is identified as a gift or fellowship to the
University or the UC San Diego Foundation, the Gift
Administration Office requires the following
documentation:

Copy of the solicitation/proposal documentation
or fellowship application submitted to the donor
when the donation was requested.

Original and one copy of all documentation
received from the donor, including donor's
check, if applicable;

A copy of the certification of approval issued by
the appropriate Human/Animal Subjects
Committee(s) when human/animal subjects are
involved;

Verification of the Institutional Biosafety
Committee (IBC) approval when recombinant DNA
is involved;

Original signed Form 730-U, Principal
Investigator's Statement of Economic Interests
(for fellowships and restricted gifts only). A
restricted gift is one that is earmarked by the
donor for a specific researcher or for a specific
research project for which the researcher has
responsibility.

Informal solicitation by principal investigators will not
be accepted by the University without the required
documentation described in Section VI.A. above. It
may also be necessary for the Gift Administration
Office to contact the donor directly to confirm the
terms of the gift or fellowship if adequate
documentation is not provided.

NOTE: If answers to questions in section C. and D. of
the 730-U are "no", the 730-U is treated as a
"negative statement" and no other action is required. If answers to questions in C. and D. are "yes", the
730-U is treated as a "positive statement" and the
researcher's relationship with the sponsor must be
formally reviewed by the Conflict of Interest
Independent Review Committee and approved by the
Chancellor.

Contracts or Grants (Office of Contract & Grant Administration)

Awards classified as contracts or grants shall be
administered by the OCGA and Extramural Funds
Accounting, in accordance with agency and
University policy (reference PPM Sections 150 and
300). All of these awards are subject to:

Indirect cost recovery in accordance with
University policy;

The review process utilized for government
contracts and grants.

If an award is identified as a private contract or
grant (inclusive of awards from other organizations
based upon Federal flow-through funds), the OCGA
requires the following documentation:

A fully executed original Request for Extramural
Support (RES) form, FO 2075;

A copy of the certification of approval issued by
the appropriate Human/Animal Subjects
Committee(s) when human/animal subjects are
involved;

Verification of the Institutional Biosafety
Committee (IBC) approval when recombinant DNA
is involved;

Original signed Form 730-U, Principal
Investigator's Statement of Economic Interests.

Informal solicitations by principal investigators will
not be accepted by the University without the
required documentation described in Section VI.B.
above. It may also be necessary for the OCGA to
contact the agency directly to confirm the terms and
conditions of the contract or grant award.

Service Agreements (Business Office)

Awards classified as service agreements shall be
administered by the Business Office and Extramural
Funds Accounting in accordance with Sections 300
and 500-4 of the campus Policy and Procedure
Manual. All of these awards are subject to:

Indirect cost recovery in accordance with
University policy;

The review process utilized for government
contracts and grants, if appropriate.

If an award is identified as a service agreement, the
Business Office requires the following documentation:

A copy of the certification of approval issued by
the Human/Animal Subjects Committee(s) when
human/animal subjects are involved;

A copy of the Institutional Biosafety Committee
(IBC) approval when recombinant DNA is
involved;

UCSD checklist Approval of External Purchase
Order for Business Office Execution.

*NOTE: The proposed agreement will require
Business Office and legal review. The agreement
may require revisions before being executed. Contacting the Business Office, extension 43782,
prior to finalizing any service agreement will expedite
the approval process.

Forward all awards which are not clearly
definable as gifts or fellowships, to the
respective campus office for review.

Review, accept and administer gifts and
fellowships in accordance with University policy.

Business Office

Verify initial award classification.

Forward all gifts, contracts and grants received
in error to the respective campus office for
review.

Review, accept and administer service
agreements in accordance with University policy. Verify that indirect costs are recovered as
appropriate.

Office of Contract and Grant Administration

Verify initial award classification.

Forward all gifts and service agreements
received in error to the respective campus office
for review.

At the request of the Conflict of Interest
Independent Review Committee, perform
additional classification review of designated
awards.

Review, accept and administer contracts and
grants in accordance with University policy. Verify that indirect costs are recovered as
appropriate.

Cognizant Academic Vice Chancellor

Where exercise of Chancellorial authority in award
classification decisions is indicated, the cognizant
academic Vice Chancellor reviews award
documentation materials and the results of the
classification process and, in consultation with the
Vice Chancellor-Business Affairs or Vice Chancellor-
Administration, recommends classification to the
Chancellor in accordance with the definitions
specified in Section V.

Chancellor

When appropriate, act as final authority for
determination of award classification.